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Commodities Silver

Silver Price Falls to $32 as Ceasefire Hopes and US Downgrade Weigh

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  • May 20, 2025
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Prices for silver have fallen to the $32 an ounce level amid increased hopes of a possible ceasefire between Russia and Ukraine, damping safe-haven demand. This was in spite of the fact that the metal’s losses were partly supported by Moody’s downgrade of the US sovereign credit rating, which indicates fears about the rise in debt and fiscal issues. Also, softer US inflation data and poor retail sales lifted expectations for rate reductions by the Federal Reserve this year, introducing additional complexity to silver’s short-term outlook as investors balance geopolitical events against economic indicators. KEY LOOKOUTS • Observe how developments or reversals in Russia-Ukraine ceasefire negotiations impact silver’s safe-haven demand and price action. • Watch for continued US credit rating developments and additional downgrades that may influence investor sentiment and precious metals. • Watch for upcoming Fed speeches and data releases that may reinforce or change market expectations for 2025 interest rate reductions. • Follow inflation reports, retail sales, and other economic releases that may add credibility or undermine silver’s attractiveness as a hedge against economic instability. Investors should closely monitor several factors that could shape silver’s price trajectory in the coming weeks. Progress in Russia-Ukraine ceasefire negotiations remains a critical driver, as any breakthrough could reduce safe-haven demand and weigh on prices. Meanwhile, further developments regarding the US sovereign credit rating, especially potential additional downgrades, may impact market confidence and support precious metals. Federal Reserve policy cues will also be instrumental, with future speeches and economic reports releases affecting rate cut expectations during 2025. US inflation and retail sales data will still remain important in dictating silver’s attractiveness in the face of general economic uncertainty. Important points to observe are developments in Russia-Ukraine ceasefire negotiations, which will alleviate safe-haven demand for silver. Further, news regarding the US credit rating and Federal Reserve policy directions will drive investor attitude and direction. Economic releases on inflation and retail sales will also affect silver’s future. • Prices of silver are declining towards $32 due to hopes over possible Russia-Ukraine ceasefire negotiations. •  Geopolitical tensions subside, weakening safe-haven demand for silver. •  Moody’s recent reduction of the US sovereign credit rating is only partially mitigating silver’s decline. • Weaker US inflation data supports Federal Reserve rate cuts in 2025 expectations. •  Disappointing US retail sales dampen economic growth expectations, potentially supporting silver. • Markets are expecting two Fed rate cuts this year, which are likely to start in September. • Future Fed speeches and economic releases will be pivotal for silver’s short-term direction. Silver prices have eased recently in the face of increasing expectations of a ceasefire between Ukraine and Russia. This is alleviating geopolitics tensions, which have historically fueled demand for safe-haven metals such as silver. Meanwhile, there are still worries over the US economy, with recent statistics pointing to slowing growth and easing inflation, which causes investors to closely monitor economic policy shifts. XAG/USD DAILY PRICE CHART CHART SOURCE: TradingView Additionally, driving the market is Moody’s downgrading of the US credit rating, which indicates long-term fiscal problems. Although this action has brought some hesitation, investors are also eyeing coming indicators from the Federal Reserve and overall economic patterns. Collectively, these factors form a complicated backdrop to silver, as global events and economic conditions continue to influence its allure. TECHNICAL ANALYSIS Silver (XAG/USD) has been trending below major support levels at $32.50, indicating bearish pressures in the short term. The price of the metal is heading towards the $32.00 psychological support, which traders will be keeping an eye on for possible buying interest or a breakdown. Moving averages are treading downwards, and momentum indicators are indicating diminishing buying pressures. But any undoing of geopolitical tensions or change in economic statistics can precipitate technical rebounds, and thus the $32 level becomes a key pivot point in the near future. FORECAST Prices for silver could rebound in case geopolitical tensions erupt again, especially if ceasefire negotiations between Russia and Ukraine falter or break down. Fresh uncertainty tends to lift demand for safe-haven assets such as silver. Also, if future US economic data are disappointing or inflation proves sticky, investors would look to silver as a haven against economic uncertainty. Any signal from the Federal Reserve that rate cuts are going to be postponed or less aggressive than anticipated would also favor silver prices. Downside-wise, movements towards a peaceful settlement between Russia and Ukraine could continue to mitigate safe-haven demand, further pressuring silver prices. Enhanced global economic conditions or better-than-anticipated US data may diminish the metal’s popularity as a non-yielding asset. Additionally, stabilization or enhancement of the US credit rating may revive investor trust in conventional markets and put pressure on precious metals. Finally, a more rapid pace of Federal Reserve rate increases or postponed cuts will most likely make silver less desirable, resulting in continued falls.

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Currencies NZD/USD

NZD/USD Fights Below 0.5900 As PBoC Cuts Rate, US Credit Downgraded

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  • May 20, 2025
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NZD/USD currency pair continues to face pressure at the 0.5900 level after the People’s Bank of China (PBoC) lowered its one-year Loan Prime Rate by 0.10 percentage point to 3.00% from 3.10%, a move that dented the New Zealand Dollar because of China’s close economic relationship with the latter. While blended Chinese data contributed to market volatility, New Zealand Q1 data revealed the steepest increase in producer prices in close to three years, fueling inflation fears. In contrast, the US Dollar softened following Moody’s downgrade of the US credit rating from Aaa to Aa1 due to increasing federal debt and fiscal difficulties. Market players now look forward to the Reserve Bank of Australia’s rate decision later today. KEY LOOKOUTS •  Ongoing market response to the PBoC’s reduction of the Loan Prime Rate and how that affects demand for the New Zealand Dollar, considering the nations’ robust trade relationship. • Look out for news or commentary on domestic inflation, particularly after Q1’s steep increase in producer input and output prices, which may be affecting RBNZ policy expectations. • Market sentiment may change considerably on the Reserve Bank of Australia’s future interest rate decision and guidance, affecting overall risk sentiment and AUD-cross flows. • Keep track of the market’s continuous reaction to Moody’s US credit rating downgrade and how it influences USD strength, Treasury yields, and overall risk appetite. Markets are watching carefully various factors that are affecting the NZD/USD pair. The People’s Bank of China’s recent rate cut still dents the New Zealand Dollar, evidencing the tight trade nexus between the two countries. Locally, New Zealand’s Q1 producer price surge has concerned observers with a possible resurgence in inflation pressures, which would have implications for monetary policy in the future. Also on the radar is the Reserve Bank of Australia’s decision next week, with a likely cut anticipated even with solid employment figures. The US Dollar, on the other hand, is under pressure after Moody’s downgrade of its credit rating, triggering wider fears about American fiscal stability. NZD/USD is under pressure with China’s rate cut and New Zealand’s renewed inflationary fears. Traders are also awaiting the RBA’s rate decision and the weakening of the US Dollar after Moody’s credit downgrade. • NZD/USD is trading close to 0.5900, still subdued after the PBoC reduced its one-year Loan Prime Rate to 3.00%. •  China policy relaxation puts the New Zealand Dollar under pressure as both nations have robust trade links. • Chinese economic data is mixed, with stronger-than-expected industrial production but soft retail sales. •  New Zealand’s Q1 statistics revealed the steepest increase in producer input and output prices in almost three years, triggering inflation fears. •  Market focus turns to the RBA, due to be cutting interest rates by 25 basis points even after solid jobs data. •  The US Dollar falls after Moody’s lowered the US credit rating to Aa1 from Aaa, citing increased debt and fiscal issues. •  Broad risk sentiment remains delicate in the face of global rate policy divergence and fiscal policy uncertainty in large economies. New Zealand Dollar continues to be pressured by developments in the global economy, which continue to influence the sentiment of investors. The recent move by China to reduce its one-year Loan Prime Rate is indicative of persistent efforts to spur its economy, which has been reporting mixed signals with higher industrial output but lower retail sales. With New Zealand having a strong trade connection with China, these policy actions always have a major influence on the NZD. And at the same time, domestic inflation worries are re-emerging with the latest figures indicating a significant increase in producer prices—highlighting possible cost pressures within the economy. NZD/USD DAILY PRICE CHART CHART SOURCE: TradingView And the general market is absorbing Moody’s downgrade of the credit rating of the United States, a step that mirrors increasing concern about long-term fiscal sustainability. This move, coupled with projections of increasing debt and expanding deficits, has made markets wary globally. The Reserve Bank of Australia’s rate decision is now catching investors’ attention, with expectations of an indication on how another major regional economy is coping with changing economic conditions. All these events as a whole shape market sentiment and could direct monetary policy expectations in the weeks to come. TECHNICAL ANALYSIS NZD/USD is finding it difficult to make a strong move up from the 0.5920 level, indicating sustained resistance at this point. The pair is still trading below major moving averages on the daily chart, signifying a bearish short-term bias. In case of sustained downward pressure, support may be tested in the 0.5860–0.5880 region. In the up direction, a sustained move above 0.5950 would be necessary to show signs of a change in momentum. Technical levels like RSI are still neutral to slightly bearish, mirroring the pair’s guarded tone in the face of general market uncertainty. FORECAST Should market sentiment recover and global risk appetite improve, NZD/USD may recover towards the 0.5950–0.5980 resistance level. Upside surprises in New Zealand’s economic reports, for instance, stronger growth or contained inflation, can also help the Kiwi. In addition, any stabilization or improvement in China’s economy would improve New Zealand’s export prospects and spur bullish pressure in the NZD. A weaker US Dollar due to fears of fiscal health or poor economic data could also further contribute towards an upside move. On the negative side, NZD/USD could see renewed selling pressure if risk appetite weakens or Chinese economic data continues to weaken. A firmer US Dollar, fueled by safe-haven buying or hawkish rhetoric from the Federal Reserve, might send the pair down to the 0.5860 support level or lower. Locally, if New Zealand inflation pressures prompt worries about weakening demand or if the Reserve Bank is prudent, the Kiwi might stay on the back foot. Geopolitical tensions or global growth worries might also cap upside potential and predispose towards downside risks.

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Commodities Gold

Gold Retains Gains Near $3,250 as Safe-Haven Demand Increases Due to Economic and Geopolitical Fears

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  • May 19, 2025
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Gold has recovered to sit near the higher end of the intraday range at $3,250, amid increased safe-haven demand due to rising economic and geopolitical concerns. The recent credit downgrade of the US government by Moody’s, in combination with fears of growing debt and ongoing geopolitical tensions, has increased investor demand for the non-yielding metal. In addition, hopes of Federal Reserve interest rate cuts in 2025 and a weaker US Dollar are still supporting gold’s attractiveness despite hopes of a US-China trade truce and new trade agreements capping gains. Technical analysis suggests cautious optimism, with key resistance levels at $3,252 and $3,275 to watch before further gains can be confirmed. KEY LOOKOUTS • Gold’s ability to sustain gains above the $3,250-$3,252 resistance zone will be crucial to confirm a potential rebound and open the way toward the $3,300 mark. • Keeping a watch on US economic data and Federal Reserve statements is crucial, as dovish comments may continue to undermine the US Dollar and bolster gold prices. • The ever-present geopolitical risks in the Middle East and Russia-Ukraine tensions continue to be essential factors that may fuel safe-haven demand and shape gold’s direction. • A dip below the $3,200 support level may expose gold to more weakness towards $3,178 and even further to the $3,120-$3,100 area, probing lower support levels. Investors need to carefully monitor if gold is able to stay above the key $3,250–$3,252 resistance level, as a break above this level could set the stage for advances to the $3,300 level. Critical upcoming releases of US economic data and Federal Reserve speeches will also be crucial, as dovish indications can continue to weaken the US Dollar and underpin prices for gold. In the meantime, the ongoing geopolitical tensions in the Middle East and the Russia-Ukraine crisis continue to underpin safe-haven demand. On the other hand, a firm fall below the $3,200 support area may initiate additional selling pressure and drive gold to the $3,120–$3,100 levels to probe lower support levels. Gold’s next move depends on a break above the $3,250 resistance to reach $3,300, aided by safe-haven buying and a weaker US Dollar. Major US economic indicators and geopolitical tensions will also drive price action, while a fall below $3,200 may indicate deeper losses. • Gold price is hovering at the upper limit of its intraday range at $3,250 on the back of safe-haven demand. • Moody’s downgrade of the US credit rating has raised concern about the fiscal health of the US, adding to the attractiveness of gold. • US Dollar is weighed down by expectations of Federal Reserve interest rate cuts in 2025 and is supporting gold prices. • Positivity toward a US-China trade truce and possible new trade agreements tops the gold’s upside. • Political tensions in the Middle East and persistent Russia-Ukraine conflict support safe-haven buying. • The key resistance zones to monitor are $3,250–$3,252 and $3,274–$3,275; a break above may take prices to $3,300. • Support zones are around $3,200 and $3,178–$3,177; a break below may see prices fall further to $3,120–$3,100. Gold prices have strengthened recently as investors seek safety amid mounting economic and geopolitical uncertainties. The surprise downgrade of the US government’s credit rating by Moody’s has raised concerns about the nation’s fiscal health and growing debt, prompting a shift toward safe-haven assets like gold. Additionally, expectations that the Federal Reserve may cut interest rates in 2025 have weighed on the US Dollar, further enhancing gold’s appeal. Geopolitical tensions, especially persistent conflict in the Middle East and Eastern Europe, still keep demand for the precious metal as a defensive asset on the rise. XAU/USD DAILY PRICE CHART CHART SOURCE: TradingView In spite of some optimism over a short-term US-China trade truce and expectations of more trade deals, these encouraging developments have yet to assuage investor worries to a great extent. Ongoing risks such as revived threats of tariffs from the US administration and patchy economic indicators of diminishing growth keep investors in a subdued mood. Consequently, gold continues to be a popular choice for investors who wish to hedge against economic uncertainty and geopolitical tensions in the short term. TECHNICAL ANALYSIS Gold is now probing major resistance levels, implying subdued optimism among traders. The metal is testing resistance at its recent highs, which indicates that buyers are unwilling to drive prices much higher without greater momentum. Technical indicators and moving averages imply that gold might be consolidating and will wait for a definitive breakout to establish a sustained uptrend. On the other hand, any inability to penetrate these points of resistance may bring about temporary pullbacks, and thus it would be crucial that investors observe price action carefully before entering into new positions. FORECAST If gold can pierce the present resistance levels, it may be able to draw in fresh buying interest, sending prices higher. All this could be fueled by sustained geopolitical tensions, continuing US credit rating fears, and ongoing hopes for Federal Reserve rate reductions. Under these circumstances, gold may be able to experience a sustained rally as investors turn to it for protection against economic uncertainty and weakness in currencies. On the negative side, supportive news such as advancements in US-China trade talks or indications of more vigorous economic growth may undermine the attraction of gold as a haven. Moreover, any surprise hawkish cues from the Federal Reserve or revival of the US Dollar could act as a dampener on the prices of gold. Failing to support key levels of support might induce additional selling pressure leading to a pullback as market players reconsider risk appetite and migrate to high-yielding assets.

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Currencies

USD/CAD Holds Firm Above Mid-1.3900s on Mixed Signals: Oil Prices Drag Loonie While US Credit Downgrade Cuts Gains

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  • May 19, 2025
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USD/CAD currency pair holds firm above the mid-1.3900s, trading in a comfortable range on mixed market signals. Weaker crude oil prices continue to suppress the commodity-sensitive Canadian dollar, lending some support to the USD/CAD. But bearish pressure on the US dollar from a recent credit rating downgrade and anticipation of future Federal Reserve rate cuts dampen the pair’s upside. Moreover, increasing optimism surrounding a possible US-Canada trade agreement provides further warning for bullish traders. There is no important economic data due on Monday, so market attention turns to FOMC speeches and movements in oil prices, which could present short-term trading opportunities. KEY LOOKOUTS • USD sentiment could be influenced by statements from key FOMC members. • Since Canada’s dollar is heavily influenced by crude prices, dramatic shifts in oil markets will also affect the pair’s momentum. • Additional news or responses about the US government’s credit downgrade could continue to put pressure on the USD and influence the currency pair. • News or negotiations of a possible trade deal could drive the Canadian dollar higher and curb USD/CAD’s advances. Market participants will carefully monitor forthcoming Federal Reserve speeches to read tea leaves about the direction of US interest rates, which can have a profound effect on the USD/CAD pair. In the interim, crude oil price volatility continues to be a key factor, as it directly affects the commodity-sensitive Canadian dollar. Moreover, any subsequent developments or market responses concerning the recent US credit rating downgrade will tend to put pressure on the strength of the US dollar. Lastly, developments in US-Canada trade talks will be watched closely, as a prospective agreement would strengthen the Canadian currency and cap the pair’s upside potential. Traders will look to Federal Reserve rhetoric for direction on interest rates, while moves in the oil price remain a big influence on the Canadian dollar. Events surrounding the US credit rating downgrade and US-Canada trade negotiations will also be important in determining the near-term direction of USD/CAD. •  USD/CAD stays firm above mid-1.3900s, trading in a familiar range. •   Weaker crude oil prices support the Canadian dollar, underpinning USD/CAD gains. •  The US dollar is under pressure due to a recent credit rating downgrade. •  Federal Reserve rate cut expectations contain the USD’s upside potential. •  Hopes for an imminent US-Canada trade agreement bolster the Canadian dollar. •  No significant economic data releases are scheduled from the US or Canada on Monday. •  Future Federal Reserve speeches and oil price actions may generate short-term volatility. USD/CAD currency pair keeps trading steadily within a well-known range as mixed political and economic forces determine market sentiment. The Canadian currency continues to be driven by fluctuations in oil prices, indicative of the nation’s close association with the energy industry. And other events like the US government’s credit downgrade and US monetary policy expectations help trigger wary trading practices. USD/CAD DAILY PRICE CHART CHART SOURCE: TradingView Moreover, continuing discussions among US and Canadian policymakers regarding trade policy policy give some hope of increased economic collaboration, and that can provide a boost to the Canadian dollar. With no significant economic data due in the near future, investors are focusing intently on statements from major policymakers as well as trends in global oil markets for hints about the currencies’ future path. Generally, traders are being cautious, weighing these different factors as they try to navigate the situation. TECHNICAL ANALYSIS USD/CAD currency pair is stuck in a well-consolidated range, indicating minimal momentum for a definitive break. Crucial support zones in the vicinity of the mid-1.3900s have remained intact, whereas resistance around the 1.4000 level continues to limit upside attempts. Minimal directional cues point to the fact that traders are holding back in anticipation of sharper market drivers in order to initiate larger positions. Momentum indicators and moving averages at this point in time indicate a neutral position, hinting at the pair’s consolidation amidst mixed fundamental forces. FORECAST If USD/CAD succeeds in breaching the crucial level of resistance at 1.4000, it could pave the way for more gains. A rise in the US currency—perhaps inspired by comments from Federal Reserve officials being hawkish or an oil price rebound—would most likely fuel this movement. Any delays in US-Canada trade talks and any setbacks could also press down on the Canadian currency, leaving more latitude to the USD/CAD exchange rate to increase. To the negative, fresh strength in crude oil prices would add to the Canadian dollar and exert downward pressure on the USD/CAD. Advancements in US-Canada trade negotiations or other better-than-expected economic news in Canada could also add to the loonie. Additionally, if the US dollar continues to get battered by issues like the credit rating downgrade or decelerating economic growth, the pair would test support levels in the mid-1.3900s or even extend lower.

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